Underquoting

A term you may or may not be familiar with is ‘underquoting’.

In NSW, the practice of underquoting is now highly illegal and NSW Fair Trading takes it very seriously when they hear of situations where selling Agents are underquoting.

There are hefty fines in place and some Agents run the risk of losing their Licence if they are found to be underquoting a price on a property.

Put simply, this is when a selling Agent quotes a price to a potential Buyer that is lower than the price they have stated on their Agency Agreement (the Agreement signed by the Vendor when they decided to trust the sale of their home to the Agent).

The price an Agent puts on the Agreement is the price they have deemed the property is likely to sell for, based on their knowledge of the area and based on their Comparative Market Analysis (CMA) which shows recent sales and current listings.

An example of this is when a property is listed for sale and the price seems very low compared to other properties that have sold or are listed in the area.

Unfortunately, the underquoting rules seem to be a very grey area when it comes to listing an Auction ‘price guide’ as these guides are commonly known for being well lower than the expected sales price of the home. A Buyers Agent can help you to better understand these ‘guides’ and price expectations.

You can find out more about the confusion of Price Guides in our podcast at www.anchor.fm/buywithalicia